10 - Taxation Flashcards
What 2 investing services have VAT charged at the standard rate?
Portfolio Management fees & Investment advice
What is the rate of SDRT?
0.5% of a share purchase over £1000
What are the 3 main characteristics of capital losses?
-They must be offset against any gains in the same year before the annual exemption is used
-Losses carried forward need only be used after the annual exemption is used up
-Net capital losses in the year of death can be carried back for up to 3 years
What are the 3 tax brackets?
-Basic rate (20%) up to £37,700
-Higher rate (40%) up to £150,000
-Additional rate (45%) over £150,000
How is the nil rate band passed on through generations?
The percentage nil rate band is passed on to inheritors
What is the immediate income tax relief given to an investor in an Enterprise Investment Scheme (EIS)?
30% but with a 3 year holding period
What is the main FATCA requirement?
FATCA requires all foreign financial institutions (FFIs) to provide information about their US customers to the IRS
What is the personal allowance?
£12,570 for salaries below £125,140
What percentage of a single premium life assurance bond can be taken from the original capital as income per annum on a tax deferred basis?
5% plus any unused allowance from previous years
For Non-doms living in the UK, what asset transfer is considered a ‘chargeable transfer’ for UK IHT purposes?
Any transfers of UK assets
What is the UK Corporation tax rate?
19%
When is inheritance tax (IHT) paid?
IHT is paid on death and may be paid in life on a chargeable lifetime transfer
How is the personal allowance reduced for salaries over £100k?
Personal allowance is reduced £1 for every £2 earned over £100k
What is the maximum annual VCT subscription to attract tax relief?
£200,000
To whom can you transfer money and be exempt from IHT?
Spouse/civil partner
Who pays class 2 National Insurance contributions?
Self-employed people
What is the dividend allowance for all investors?
£2000
What are the marginal dividend rates for each income tax bracket?
-8.75%
-33.75%
-39.35%
What are the savings/interest allowances for each income tax bracket?
-£1000
-£500
-£0
What must be declared as earned income?
Income includes salary and wages, bonus, commission and fees and benefits in kind
What is the capital gains tax for a Venture Capital Trust (VCT)?
Zero; they are exempt
What is the capital gains tax for an Enterprise Investment Scheme (EIS)?
Zero, if they are held for at least 3 years
What are the capital gains tax rates on residential property for basic rate and higher/additional rate payers?
18% & 28%
What is the capital gains tax rate on regular assets for basic rate and higher/additional rate payers?
10% & 20%
What is the maximum amount of funds you can take from your pension without incurring an immediate tax charge?
25%
What is the annual capital gains allowance for all investors?
£12,300
How many days must you leave between transactions to recognise the disposal for CGT purposes?
30 days
Who allocates a debtor’s assets following bankruptcy?
The Receiver
What is the maximum wedding gift exempt from IHT?
£5000
What is the IHT on gifts to charity?
Gifts to charity are IHT exempt
How much can you gift each year exempt from IHT?
£3000 per year
What is the tax on companies buying residential properties over £500,000?
Anti-avoidance rate of 15%
What shares are SDRT exempt?
AIM shares
What is the chargeable lifetime transfer IHT rate?
20%
What is a gift with reservation?
When the owner gives away an asset but continues to benefit from it
